Rupee recovers after hitting 3-wk lows on IIP, inflation data
On Interbank Foreign Exchange (Forex) market, the rupee commenced lower at 53.95 a dollar from the previous close of 53.85,. It dropped to a three-week intra-day low of 54.07 on continued dollar demand from importers and initial hesitancy in local stock markets.
Dollar demand surged after government data showed growth in industrial output contracted by 0.6 per cent in December while retail inflation, on the other hand, remained in double digits at 10.79 per cent in January.
However, late dollar selling by exporters and rise in stocks helped the rupee to bounce back to a high of 53.84, before ending at its overnight closing level of 53.85.
In last four trading sessions, the rupee had dipped by 71 paise or 1.34 per cent against the US dollar.
"The rupee witnessed a pressure after the disappointing IIP numbers. However it saw late appreciation taking cues from recovery in domestic stocks, the gains in the euro and weak dollar index," said Abhishek Goenka, Founder and CEO, India Forex Advisors.
According to provisional BSE data, FIIs bought Indian stocks worth Rs 600 crore today. The Indian benchmark Sensex closed up by 100.47 points, snapping a eight-day losing trend.
Globally, the dollar index was down by 0.21 per cent against a basket of six major currencies, which also aided the rupee to end stable.
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